A Project Report
“CRM practices in Retail Sector”
Prof. Sushil Chaurasia
Tolani Institute of Management Studies
Retail sector is one of India's fastest growing sectors with a 5% compounded annual growth rate. Retail is India’s largest industry. It accounts for over 10% of the India's GDP and around 8% of the employment. Driven by changing lifestyles, strong income growth and favorable demographic patterns, Indian retail is expected to grow 25% annually. India's huge middle class base and its untapped retail industry are key attractions for global retail giants planning to enter newer markets. It is expected that retail in India could be worth US$ 175-200 billion by 2016.
The organized retail industry in India had not evolved till the early 1990s. Until then, the industry was dominated by the un-organized sector. It was a sellers market, with a limited number of brands, and little choice available to customers. Lack of trained manpower, tax laws and government regulations all discouraged the growth of organized retailing in India during that period. Lack of consumer awareness and restrictions over entry of foreign players into the sector also contributed to the delay in the growth of organized retailing. Foundation for organized retail in India was laid by Kishore Biyani of Pantaloon Retails India Limited (PRIL). Following Pantaloon's successful venture a host of Indian business giants such as Reliance, Bharti, Birla and others are now entering into retail sector.
A number of factors are driving India's retail market. These include: •
Increase in the young working population,
Nuclear families in urban areas,
Increasing working-women population,
Increase in disposable income and
Customer aspiration and increase in expenditure for luxury items.
India's retail boom is manifested in extensive shopping centers, multiplex-malls and huge complexes that offer shopping, entertainment and food all under one roof. But there is a flip side to the boom in the retail sector. It is feared that the entry of global business giants into organized retail would make unneeded the neighborhood ‘kiryana’ stores resulting in dislocation in traditional economic structure. Also, the growth path for organized retail in India is not hurdle free. The taxation system still favors small retail business. With the intrinsic complexities of retailing such as rapid price changes, constant threat of product outdated and low margins there is always a threat that the venture may turn out to be a loss making. Trained human resource for retail is another big challenge. The talent base is limited and with the entry of big giants there is a cat fight among them to retain this talent. This has resulted in big salary hikes at the level of upper and middle management and thereby eroding the profit margin of the business. All the companies have laid out ambitious expansion plans for themselves and they may be hampered due lack of requisite skilled manpower.
But retail offers tremendous growth for the Indian economy. If all the above challenges are tackled prudently there is a great potential that retail may offer employment opportunities to millions living in small town and cities and in the process distributing the benefits of economic boom and resulting in equitable growth.
For a long time marketers implemented there 4 P’s strategy to attract and satisfy their target customers but post liberalization, highly competitive and dynamic business environment has forced the businesses to think not only to attract but also to retain their customers, specially profitable once. CRM is putting your customer at the heart of your business. It is process or methodology used to learn more about customer’s needs and behaviors in order to develop stronger relationships with them. There are many technological components to CRM, but thinking about CRM in...
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